Wednesday, January 02, 2013

Wednesday Afternoon Links

Miscellaneous material for your mid-week reading.

- Frank Graves writes about the decline of Canada's middle class - and notes a parallel between the type of economy which tends to produce broad social failure, and the Cons' familiar obsession with extraction:

The other key factor is rising inequality and a failing middle class.
Our evidence has shown that as economic issues have become the dominant
concerns for Canadians they are — for the first time in our research —
twinned at the pinnacle of public issues with blended concerns about
fairness and inequality. These are not the traditional and more modest
concerns we have seen about the gap between the rich and poor. The new
and more potent linkage is the gap between the über rich and everyone
else. Nowhere is this dynamic more evident than in what can only be
described as the crisis of the middle class.

The middle class has always been by far the most popular self-defined
class denomination in upper North America — one of the reasons it is
such a popular political target. The 20th century ascension of the
United States to the “hyperpower” status it enjoyed as little as a
decade ago was largely the culmination of an unprecedented period of
middle class ascendance.
...
In analysing why societies fail, Daron Acemoğlu
has a very insightful theory that suggests the harbinger of societal
failure is a shift from an ‘inclusive’ to an ‘extractive’ economy. The
swelling of upper North America’s middle class in the 20th century is a
shining example of a successful inclusive economy. Among other examples,
Acemoğlu argues that Venice went from backwater to world powerhouse and
back to a sterile urban museum-in-waiting when it shifted from an
inclusive to an extractive economy. The diminution of taxes and public
services and the rise of the ‘one per cent’ has been coupled with a
similar shrinkage and relative decline in the North American economy —
and could be a chilling harbinger of our future economic well being.

- But look on the bright side: at least our mass-murder industry is seeing massive international growth potential thanks to the Cons' choice of trade priorities.

- Andrew Pollack discusses the latest example of how prescription drug profits can fall neatly into the pure extraction category - as a drug launched in the 1950s is now being widely sold in the U.S. for $28,000 per dose.